AMRITPAL SINGH GREWAL COL Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner purchased house No. 206, Sector 36-A, Chandigarh, measuring 1,183 sq. yards (more than two kanals) for the sale consideration of Rs. 9,50,000, vide sale deed dated December 28, 1982, in pursuance of the agreement dated fuly 29, 1982. THE Income-tax Department obtained the valuation report of the house on June 9, 1983, according to which the value of the property was Rs. 13,88,000. Acting upon the same, the petitioners were called upon to submit their reply to the report of the Valuation Officer. THE petitioners submitted their reply on June 21, 1983, contesting the correctness of the report. THEreupon, the Income-tax Department issued notice to the petitioners and vendors of the house in dispute under Section 269D(1) of the Income-tax Act, 1961, regarding initiation of proceedings for acquisition of the house as the Department had reasons to believe that the fair market value of the property exceeded the apparent consideration as agreed to between the parties. THE petitioners, in reply to the notice, reiterated their stand that the house had in fact been purchased for Rs. 9,50,000 only and added that, in case the Department was not satisfied with the explanation, the house could be acquired and compensation paid to the petitioners. THE matter remained pending and ultimately on October 7, 1985, final order was passed under Section 269F(6) of the Income-tax Act, 1961. THEreafter, the necessary notification was issued on August 11, 1986, whereby possession was taken over and compensation amounting to Rs. 10,92,500 was paid to the petitioners.

(2.) THIS notification reads as under :

(3.) IN the written statement, the INcome-tax Department has justified its decision by pleading that the amount paid to the petitioners, that is, Rs. 10,92,500, was by way of compensation paid in accordance with the statutory provisions, that is, the apparent consideration amounting to Rs. 9,50,000 plus 15 per cent. interest thereon. Therefore, the enhanced compensation in respect of any item claimed by the petitioner was not payable by the INcome-tax Department.